PPG has posted record sales for the fourth quarter and full year of 2023. Full-year results include net sales of US$18.2 billion – aided by three per cent organic sales growth – and record operating cash flow of over US$2.4 billion, up more than US$1.4 billion year-over-year.
In the fourth quarter, the company achieved net sales of US$4.4 billion, up four per cent year-over-year and including organic sales growth of one per cent. Automotive Refinish Coatings organic sales grew by a low single-digit percentage, aided by growth in Europe and Asia.
“Capping off a record year, the PPG team delivered solid year-over-year sales growth, strong adjusted earnings growth and record operating cash flow,” said Tim Knavish, Chairman and Chief Executive Officer of PPG.
“The breadth and diversity of our business portfolio was a key driver to our record fourth quarter performance as we benefited from solid volume growth in China, demand stabilisation in Europe and continued growth in several key end-use markets such as Aerospace, Automotive Original Equipment Manufacturer, and Protective Coatings.”
“We made strong progress on returning to our historic segment margin profile while delivering segment earnings growth of 30 per cent and an aggregate segment margin improvement of 260 basis points, marking the fifth consecutive quarter of year-over-year margin improvement.
“Additionally, our earnings growth and working capital management resulted in strong cash generation in the quarter and record operating cash flow of over US$2.4 billion for the year. We ended the year with a strong balance sheet that, coupled with our legacy of solid cash flow, provides us with shareholder value creation opportunities going forward.”
Over the full year, Knavish said PPG implemented various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth. The company executed on its ongoing portfolio review, leading to the divestitures of its European and Australian traffic solutions businesses and the recently announced strategic alternatives review of the silicas products business.
Looking ahead, Knavish said that while global industrial production remains at low absolute levels, PPG expects that demand in China will continue to improve and European economic activity will stabilise in 2024 at current levels. In the US, PPG anticipates that economic conditions will remain subdued during the first half of 2024, and in Mexico, which is now the company’s second largest country in terms of total net sales, strong momentum is expected to continue.
“From a PPG perspective, we plan to deliver volume growth in 2024 by executing on our key strategic growth initiatives and fully capitalising on continued demand in several areas, including aerospace and Mexico, which will also benefit from cross-selling initiatives through our concessionaire network,” said Knavish.